CHAPTER 5:

A. Obligations of Buyer and Seller

I. Sale of breach
Serious breach of this nature is known as “fundamental breach”
Fundamental breach –a breach is fundamental if it results in such detriment to
the other party as substantially to deprive the innocent party of what they are
entitled to expect under the contract, unless the party in breach did not foresee
and a reasonable person of the same kind in the same circumstances would not
have foreseen such a result.
 Remedies for breach include:
o Demand for performance;
o Allowance of additional period of time;
o Completion of performance;
o Suspension of performance;
o Avoidance of contract;
o Price reduction;
o Damages.
B. Buyers’ remendies
I. CISG
 Buyers’ remedies for breach include:
o Require the seller to perform agreed contractual obligations;
o Reduce the price of non-conforming goods;
o Suspend their own performance of the contract (if anticipatory breach);
o Declare the contract avoided;
o Claim damages for the loss suffered as a result of the breach.
II. Right to require performance
Buyer has the right to demand that the seller:
 performs all contracted obligations (e.g. to deliver the goods); and/or
 delivers substitute goods repairs
 The buyer can allow the seller additional time to do as required (Article 47), during
which time the buyer will not take any other action to enforce the contract( thi
hành hợp đồng) or seek any other remedies unless the seller refuses to perform.
Seller May Voluntarily Perform Out of Time:
The seller must inform the buyer that the seller intends to remedy the error.
If this is not acceptable to the buyer, the buyer must refuse within a reasonable
time (if the buyer does not reply, the seller can proceed).
Early Delivery and Excess Delivery
If the seller delivers the goods before the date fixed, the buyer may take delivery or
refuse to take delivery.
If the seller delivers a quantity of goods greater than that provided for in the
contract, the buyer may take delivery or refuse to take delivery of the excess quantity.
If the buyer takes delivery of all or part of the excess, the buyer must pay for the extra
goods at the contract rate
III. Right to a Reduction in Price for Non-conformit
If the goods do not conform with the contract, the buyer may reduce the price
proportionately, unless:
 the seller corrects the defect in accordance with Article 37 or Article 48 (as above);
or
 the buyer refuses to accept performance by the seller under those articles
C. Sellers’ remendies
Sellers’ remedies for breach include:
o Require the buyer to pay and/or to accept the goods;
- seller may require the buyer to pay the price, take delivery or perform
the buyer’s other obligations
- seller can allow the buyer extra time, during which time the seller will not
take any other action to enforce the contract or seek any other
remedies unless the buyer refuses to perform.
- If the goods have been lost or damaged after the risk of loss passed to the
buyer, the buyer must still pay for them
o Make, supply and claim payment for goods to the seller’s specification if
the buyer has failed to provide a specification under the contract;
o Suspend their own performance of the contract (if anticipatory breach);
o Declare the contract avoided;
o Claim damages for the loss suffered as a result of the breach.
D. Installment contract- is one in which payment or delivery
 If there is a fundamental breach of one instalment, the injured party may declare
the contract avoided for that instalment.
 If breach of one instalment gives the injured party good grounds to believe that there
will be fundamental breach of future instalments, the injured party may declare
the contract avoided for the future, provided this is done so within a reasonable
time.
 If a delivery fails in a contract in which the instalments are interdependent, the
buyer can declare contract avoided for the present instalment and for deliveries
already made and/or future deliveries
E. Damages
Damages for breach of contract by one party consist of a sum equal to the loss,
including loss of profit, suffered by the other party as a consequence of the breach
Exemption under Article 79 is only effective for the period during which the
impediment exists. The party who fails to perform must notify the other party
within a reasonable time
F. Preservation of goods
- Both parties are under a duty to preserve the goods if they are in
possession of them pending a dispute